United Illuminating is turning to the courts following the August decision of the Public Utilities Regulatory Authority, whose commissioners unanimously rejected UI’s proposed distribution rate increase of $131 million over three years, saying that the decision threatens the company’s financial health and will severely impact their customers, employees and local suppliers.
UI filed the appeal in the Superior Court in New Britain Monday and issued a lengthy statement outlining their arguments.
UI said that PURA’s decision is out of step with the state’s needs, adding that it’s a financial hit on UI and the state’s economy.
Representatives from PURA declined to comment on UI’s appeal, but did say that its office is “confident that the Office of the Attorney General will rigorously defend PURA’s unanimous decision,” according to a statement released by PURA.
The state’s Consumer Counsel Claire E. Coleman also declined to comment on the appeal specifically, but did say she will continue to advocate for the interests of United Illuminating customers throughout this appeal.
Among the issues raised in UI’s appeal, PURA’s final decision established the company’s return on equity (ROE) at 8.63% with an opportunity to earn up to 9.10% if it meets certain conditions and timelines to address performance and management issues. UI requested a 10.20% ROE.
UI is arguing that the actual ROE is much lower because the final decision extinguishes $32.3 million in deferred assets – producing an actual ROE of 2.5%.
“This unprecedented ROE will drive needed investments to other states and is insufficient to allow us to support the critical investment in reliability and modernization that Connecticut needs,” the statement reads. “Well established Supreme Court precedent holds that utility companies can recover reasonably incurred costs and can earn a fair and reasonable return on assets used to serve customers. PURA’s decision denies UI recovery of investments made in 98 projects critical to the strength and reliability of the electric grid and impacting many of our most vulnerable communities.”
UI also claims that PURA is not allowing for a transition to clean energy because it rejected UI’s proposal to install 900 electric vehicle charging stations.
In a FAQ released with its final decision, PURA said there have been 840 ports at EV charge stations deployed in UI’s service territory as of June 30, 2023. PURA was unable to rule on the EV charging stations in its rate application as there are other ongoing investigations more appropriate for the review of those proposals.
UI also argues that PURA – through its decision – is deferring investments in infrastructure that needs replacement, substations that serve thousands of customers, and capacity investments that will help protect customers from long-duration outages.
The company estimates it will lose $31.9 million annually, adding that PURA denied recovery of $118 million in incremental net plant-in-service additions.
UI also took issue with PURA’s stance on the remediation of English Station in New Haven, calling it an “abuse of discretion.”
The company claims it has invested more than $18 million to complete interim asbestos abatement, cleanup and demolition of the former Station B building.
“These are clear actions, not failures, and we will continue to meet and exceed our regulatory and legal agreements with the state of Connecticut and work with all parties to ensure English Station is cleaned up,” the statement reads. PURA circumvented the proper jurisdictional channels, and is using ROE penalties as a tool to coerce policy outcomes, according to UI.
Attorney General William Tong has previously applauded PURA’s stance on English Station, and has also praised the commission for a thorough investigation that led to its final decision.
Instead of protecting ratepayers, PURA and state legislators are not addressing high increases in energy supply costs, according to UI’s statement.
“Those costs, which are set by out-of-state generation companies, have increased more than 150 percent over the last three years, with the typical Connecticut family seeing a price spike on their monthly bill of nearly $80 this past winter, accounting for nearly 70 percent of their electric bill,” UI’s statement said.
UI said it hopes to work with state leaders to come up with solutions to the price volatility.
As part of its decision in August, PURA approved a $384.9 million annual revenue requirement for UI for the rate year starting Sept. 1, representing an increase of $22.9 million from UI’s currently approved base distribution revenue requirement.
The decision results in an average increase in base distribution rates of about 6.6% and an average increase in customer bills of about 2% compared to current levels, according to PURA.
UI, a public service company and a subsidiary of Avangrid Networks Inc., provides electricity to more than 341,000 residential, commercial, and industrial customers in 17 towns and cities in the state. It had previously increased its base distribution rates in 2016.